What is Pay for Success?

Pay for Success (PFS) is an innovative contracting model that drives government resources toward high-performing social programs. PFS contracts track the effectiveness of programs over time to ensure that funding is directed toward programs that succeed in measurably improving the lives of people most in need.

How Pay for Success Works

1. GOVERNMENT identifies a critical social issue with historically poor outcomes such as recidivism, chronic homelessness, or early childhood education.

2. PRIVATE FUNDERS such as foundations, banks and businesses, provide upfront capital to a high-performing social service provider that is helping a specific at-risk target population.

3. SERVICE PROVIDERS deliver services to key at-risk communities, in an effort to reach or exceed predetermined outcomes for success.

5. GOVERNMENT repays private funder’s initial investments only if project is successful in achieving positive outcomes.

6. PROJECT MANAGER conducts, facilitates, and advises the overall process. The project manager is sometimes called the Intermediary or Technical Assistance Advisor (like Third Sector).

“Before the Pay for Success contract, some of our programs and staff were bogged down with complying with the terms of grants and contracts. Now, we have more flexibility. Pay for Success allows us to focus our work solely on achieving outcomes for the families we serve.”

Workforce Development

Child Welfare

In Ohio, Pay for Success is funding intensive treatments for 135 families in Cuyahoga County to reduce the length of stay in out-of-home foster care for children whose familes are homeless.

Health

In California, Alameda County is exploring how Pay for Success can expand asthma prevention and management programs to about 45,000 children suffering from active pediatric asthma.

Education

The City of Las Vegas and Clark County are partnering with the State of Nevada to determine how Pay for Success can create innovative strategies to improve social outcomes in early childhood education.